Phil Tseng is stepping down as chief executive of BlackRock TCP Capital Corp (TCPC) following a difficult period for the listed private credit vehicle that included substantial loan markdowns, scrutiny of its valuation practices, and a significant restructuring of its investment portfolio, according to Private Equity Wire.
A regulatory filing cited in a Bloomberg report shows Tseng resigned as CEO on 31 August and is due to leave BlackRock on 1 October, according to Private Equity Wire.
Leadership changes at TCPC
Jason Mehring, a BlackRock executive involved with the fund, has been appointed CEO, while Dan Worrell will take over as president, according to Private Equity Wire.
Tseng’s departure follows reports in July that he had been preparing to leave the firm, according to the same report.
Portfolio overhaul and asset sales
The leadership transition follows a major overhaul of TCPC’s portfolio announced last month, according to the report.
TCPC agreed to sell $523m of loans to a vehicle backed by secondaries investor Pantheon, according to the report.
TCPC also appointed advisers at Keefe, Bruyette & Woods to explore options for a further $671 million of assets, according to the report.
NAV cuts and valuation scrutiny
TCPC has faced mounting pressure after significant reductions in the value of its private loan portfolio, according to the report.
The fund cut its net asset value by 19% in January and a further 5% in May as several investments came under stress, according to the report.
The vehicle’s valuation processes have attracted attention from US authorities, with the Manhattan US Attorney’s Office seeking information about TCPC’s valuation practices, according to reports earlier this year cited by the publication.
BlackRock’s broader private credit ambitions
The difficulties at TCPC come as BlackRock seeks to expand aggressively across private markets, according to the report.
TCPC represents only a small portion of the asset manager’s $15.3tn in assets, according to the report.
The strategy dates back to BlackRock’s 2018 acquisition of middle-market private credit specialist Tennenbaum Capital Partners, according to the report.
BlackRock has since increased its ambitions in private credit, including its approximately $12bn acquisition of HPS Investment Partners last year as it sought to strengthen its position in one of the fastest-growing areas of alternative investment, according to the report.
Widely-known context: Business development companies such as TCPC are typically publicly listed vehicles that invest in private loans.
Widely-known context: Net asset value is commonly used to describe the value of a fund’s assets minus liabilities.
